Assignment:
Case 1
Jack Pondage at all relevant times held a German passport. From the time of his first visit Australia in 2007 until the end of the 2018 income year, he held a visa which permitted him to live and work in Australia.
During the time he was in Australia, Jack worked under contract as a marine engineer on a sea-going barge owned by an Australian company. Subsequently, the barge was leased to a Malaysia-based company, Ocean Development Ltd (OD), for use in carrying out work in China. Jack accepted employment with OD and left Australia on 8 July 2017, leaving his son and wife in Australia. He worked for Ocean Development Ltd for nine months in China and earned AUD $90,000. He then terminated his contract and returned to Australia where he stayed for the rest of the income year. On his arrival back in Australia he entered into a partnership business with his wife.
Accommodation provided for Jack in China by his employer was of a temporary or transitory nature in the form of single men's quarters or barracks. Meals were also provided. Ocean Development Ltd.'s office in Malaysia paid Jack's wages into his bank account in Australia, after deducting tax required to be paid in Malaysia. Jack paid no income tax in China. Jack's assets in Australia are his home in Sydney, an investment residential unit in Randwick, a super policy with AMP, listed shares, bank accounts and membership of a local golf club. Jack intended to be absent from Australia for approximately nine months and was in fact away for that period only.
Required:
For the 2017/2018 tax year:
1) Is Jack a resident or non-resident of Australia? Refer to the relevant legislation and cases.
2) Determine the source of income Jack received while he was working in China?
Question
On 10 July 2017, Timothy Tower was transferred to the Singapore office of his company, Global AIH Ltd, for five years. His wife Eliza accompanied him to Singapore. In Singapore they lived in a house owned by the company and leased their Sydney residence. While residing in Singapore Eliza borrowed $100 000 from the Commonwealth Bank on 1 December 2017, to fund the purchase of 50 000 shares in Global AIH.
During the 2017/2018 tax year Eliza received $5 000 as her share of net rental income (after deductions) from the lease of their Australian home, and $2 500 in fully franked dividends from Global AIH. She incurred no other expenses in deriving the rental income, but her interest payments on the Commonwealth Bank loan amounted to $5 650.
Required:
Advise Eliza Tower for the Australian tax consequences of these transactions. (Hints: you need to do some research on the tax consequence of dividends paid to a resident and non-resident)